PacifiCare/Medicare’s Claims Rejected by the Ninth Circuit of Appeals

June 24, 2013

The Federal Ninth Circuit of Appeals held on April 23, 2013 in a case of some importance, that Medicare did not have the right to pursue a reimbursement claim against the wrongful death proceeds paid to surviving members.

The Ninth Circuit's ruling affirmed the 2011 decision of an Arizona federal court which dismissed Medicare/Pacificare's reimbursement claim after determining it did not have a private right of action to recover its costs. The case stemmed from the death of a PacifiCare Medicare Part C member who died from injuries suffered after a vehicle struck him in a parking lot. The surviving relatives filed a wrongful death lawsuit against the driver and recovered the full policy limits in satisfaction of the claim. Pacifcare/Medicare Part C paid $136,000 toward the decedent's medical care. The relatives suit in Federal Court in Arizona to block PacifiCare/Medicare from receiving any part of these wrongful death proceeds.

PacifCare/Medicare's claims were rejected by the Ninth Circuit when it held that Medicare Part C laws did not create a "Private cause of action" and under the facts of the case in which the decedents family was directly compensated, any reimbursement claim did not reach that recovery.

It should be noted that, as a general proposition, Medicare has a reimbursement right against an individual's personal injury claim and that would extend to any claim brought by the Estate to recover for medical expenses incurred prior to the decedent's death. However, when the claim involves only a "wrongful death" recovery, Medicare's reimbursement rights do not attach.

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